MONASH UNIVERSITY SCHOOL OF INFORMATION MANAGEMENT & SYSTEMS IMS1805 SYSTEMS ANALYSIS Semester 2, 2004 Supplementary Assessment – Renee Scionti Aim This assignment aims to test your ability to: • analyse a description of a system which is being used by an organisation and identify and classify its information problems; • use a set of DFDs to give a diagrammatic representation of the information processing carried out in the system; • identify ways in which the application of appropriate technology could be used to solve some of the organisation's information problems; and • prepare a report outlining your findings Assignment Task You are required to work as a systems analyst, investigating the operations of Best Buy supermarket. Attached are summaries of the way in which four main functional areas and supermarket management work, together with reports from the managers of each area on some of their problems. You are now required to perform the following tasks:- (i) analyse and briefly describe one of the main business processes from each business function, and identify the information needed to perform them. Your analysis should be set out in a table, and should include for each process: • the items of information needed to perform it; • sources of each item of information; • a brief description of the process, how each item of input information is used in it, and how each item of output information is created by it; • the items of information which come out of the process; • who that information will be given to. (ii) Prepare a partial set of leveled logical DFDs for the supermarket system. These should comprise: • a context diagram; • a Level 0 diagram showing all the main business functions; • a Level 1 Diagram for any one of the main Level 0 processes (use the information you have gathered in part (i) to help develop your diagrams) (iii) for each business function, report on the problems which the supermarket is having in dealing with information at present, and suggest ways in which information technology might be used to help solve them. In order to do this you will need to: • review the summaries and reports from the managers; • identify the problems; • classify these problems as input, storage, processing or output problems (note that a problem may fall into more than one category); • identify ways in which the use of information technology might help solve these problems; • identify areas where there is potential conflict between the information needs of the departments. (Some of the information problems experienced in one part of the supermarket may be due to the way things are being done elsewhere; for example there may be a problem in one department because of the way in which information is provided by another department. Similarly, changing the way in which information is recorded or stored may help one department while inconveniencing another). Note that you are NOT expected to discuss solutions to the problems in detail at this stage. Your report aims simply to provide a clear statement of each problem, and a general description of the way in which a computer could help in terms of the basic information functions - data input, processing, storage and output. You are required to provide a report, not an essay. Therefore you should use headings to structure the report for ease of reading. Assessment Guidelines Work will be assessed according to the following main criteria:- • the level of understanding shown of the nature of information systems business processes, and their use in an organisation; • the level of understanding your DFDs show of the use of diagrammatic methods of representing information flows; • the level of understanding shown of the nature of information problems and the way in which information technology can help to solve them; • the organisation and clarity of your answer; • the quality of expression and presentation of the assignment Due Date The assignment should be submitted by Friday August 19, unless otherwise negotiated with the lecturer. BEST BUYS SUPERMARKET INTRODUCTION Best Buys is a small local supermarket which has a number of departments to carry out its business functions. The Sales Department is responsible for selling goods to customers while, the Purchasing Department is responsible for buying goods from suppliers. The Stock Control Department handles the delivery of stock to the supermarket and monitors the stock levels so that goods can be ordered when required. The Finance Department manages the account customers, payments from customers, payments to suppliers and the supermarket's financial reporting. Management receive a variery of reports from the various departments so that they can readily monitor the supermarket's progress. STOCK CONTROL The Stock Control Department is responsible for the following functions in Best Buys supermarket: • RECEIVE DELIVERIES OF STOCK ITEMS All stock items are delivered with a supplier invoice. Stock control staff record the delivery on the relevant purchase orders, and send the supplier invoices to the Finanace Department to arrange payment. • RETURN DAMAGED STOCK All stock items are checked at the point of delivery and any damaged stock is returned. The invoice is changed and signed by the driver. • MONITOR STOCK LEVELS Stock levels are monitored daily from the Stock Level Changes Reports provided by the Sales Department so that the Purchasing Department can be informed of the need to order new stock. • MANAGEMENT REPORTING A Weekly Stock Level Progress Report detailing the stock levels of all stock items is sent to Management to enable them to make better marketing and discount decisions. FINANCE The Finance Department is responsible for the following functions in Best Buys supermarket: • MAKE SUPPLIER PAYMENTS Invoices from suppliers for goods which have been delivered are received from the Stock Control Department. Payments are sent to suppliers according to their payment guidelines. • RECEIVE CUSTOMER PAYMENTS Details of the daily cash sales provided by the Sales Department are recorded. The cash is sent to the bank. • MANAGE CUSTOMER ACCOUNTS Account sales details are used daily to update customer accounts. Invoices are sent to customers at the end of each month and must be paid in 14 days. Problem customers are followed up and are placed on the cancelled accounts list if necessary. • FINANCIAL REPORTING A monthly Financial Report based on sales and invoices paid during the month is prepared for Management. PURCHASING The Purchasing Department is responsible for the following functions in Best Buys supermarket: • ORDER NEW STOCK ITEMS When the Stock Control Department sends details of the need to purchase additional stock, the Purchasing Department sends a purchase order to one of the suppliers of the specified stock items. Before a purchase order is placed, Item/Supplier details are checked to get the best possible deal for the current purchasing requirements. Sometimes a quick delivery is more important than the best price. • UPDATE STOCK ITEM / SUPPLIER DETAILS Information kept on each stock item is updated whenever a supplier provides the supermarket with new or changed information. • MONITOR DELIVERIES The Stock Control Department update purchase orders with delivery information as deliveries are made. At the end of each day the Purchasing Department check the relevant purchase orders to see if expected deliveries have been made. Suppliers are contacted and asked about overdue items. • MANGEMENT REPORTING The Department provides Finance with Daily Purchasing Summary Reports and Management with Fortnightly Purchasing Summary Reports. SALES The Sales Department is responsible for the following functions in Best Buys supermarket: • RECORD CASH SALES When a customer purchases goods for cash, details of the sale are recorded using the cash register, and the customer is provided with a receipt giving the details of the sale and the payment. • RECORD ACCOUNT SALES When a customer puchases goods and wishes to use their account, details of the sale together with the customer account number are recorded using the cash register. The customer account card and a list of cancelled accounts must be checked before the sale can be made. • RECORD CUSTOMER ORDERS The Sales Department provides a service where customers can order goods by filling out an order form. The order form can be either rung in or handed in to staff. Staff prepare the order, which is then collected by the customer and paid for either by cash or account. • SALES REPORTING On a daily basis a Sales Summary Report is provided to Management, a Stock Level Changes Report is provided to Stock Control, and a Cash and Accounts Sales summary report is provided to the Finance Department together with customers cash payments. MANAGEMENT The Management of Best Buys carry out a number of functions, some of which are specified below. • DECIDE ON WHICH GOODS TO STOCK IN THE SUPERMARKET On a regular basis Management make decisions about which goods to stock in their supermarket based on the following information: - marketing information about new stock items from suppliers; - sales information about seasonal variations in product demand; - Stock Control information about slow-moving stock As a result of this review the following decisions could be made: Stock Control informed of: - new stock to add to the Stock list - stock to be removed from the Stock list - changes in re-order points Sales informed of: - items to be discounted - special marketing strategies for certain items • REVIEW PURCHASING SUMMARY REPORTS Management review the Purchasing Reports to identify buying trends. This helps them identify suppliers to target for better deals for the supermarket. If they are successful with their negotiation with suppliers, Purchasing are informed of preferred suppliers and the deals which have been made. • FINANCIAL PLANNING Management use the Financial Reports provided by the Finance Department to help make decisions about issues such as banking and taxation for maximum profit, short and long-term capital spending, liquidity problems, etc.. Based on the financial reports and advice provided by Finance, Management may change the way the supermarket deals with bad debts, the way payments are handled from customers, payment arrangements for suppliers, where the supermarket’s revenue is banked for maximum return. Summary of Comments of Departmental Heads and Supermarket Management 1. Sales • The supermarket would like to promote and expand the service which it offers which enables customers to place orders for goods (it is located in an area where there are lots of well-off young working couples who don't like to spend much time shopping in a supermarket). At present the customers write the details of the goods they want to buy onto paper forms; they record their account number on the form and it is verified against their account card when they arrive to pick up the goods. Invoices for the accounts are sent out by the Finance department. Sales staff are supposed to key all the details into the cash register as with a normal transaction, but they often don't do so (especially during busy periods), because it takes up too much time. This creates problems for the Stock Control section because they do not get the details of the goods purchased. • A Bar Code system is used to record the details of each item which is purchased. It has saved a lot of time for the checkout staff, but like most new technology it breaks down occasionally. This can cause lots of problems because the supermarket employs a lot of casual and part-time staff who are very inexperienced and don't know how to record the transaction details manually. • Cash and account sales are recorded in exactly the same way. At the end of each day the Sales staff sort through the printouts from the cash registers of the day's sales records to separate out the account sales from cash sales and calculate the totals for each to give to the Finance department. 2. Stock Control • The Stock Control department is aware that the popularity of certain products varies throughout the year, sometimes due to changes in weather, sometimes because of religious festivals, and so on. They would like to have better records of how the rate of sales of every product varies throughout the year so that they could anticipate these times of peak demand. However the Sales department provides sales records only in the form of the daily summaries of the day's transactions. • When the Purchasing department send their copies of the day's purchase orders to Stock Control (and there may be up to 100 purchase orders a day during busy periods) they are not arranged in any particular order. Stock Control have to sort them into supplier order so that they can find the right order easily when the goods arrive from a supplier. • Stock Control rely on the Stock Level Changes Report provided by the Sales department in order to monitor stock levels. However this report does not include the details of transactions done via orders. 3. Purchasing • Many of the supermarket's competitors have made arrangements with suppliers for sending purchase requests for new stock by electronic mail via the Internet. Management thinks that the use of this sort of system could save on time and paper work. • The supermarket has several hundred suppliers for the goods it stocks. It always tries to ensure that there are at least two or three different suppliers for each stock item (this makes it less likely that it will be impossible to get a particular item because there is no supplier who has it in stock). In some cases particular stock items may be available from up to 5-6 suppliers offering different prices and delivery times. Suppliers are constantly sending the supermarket catalogues containing up-dated details of the stock they can supply and its changing prices and times for delivery. All this information is kept in folders arranged alphabetically by supplier name. When a particular stock item has to be purchased the purchasing officer searches through the catalogues until he finds a supplier who sells that item. Sorting through the catalogues to find the best deal is tedious, and the supermarket has found that it is often not getting the best deal available. • When Purchasing prepare a purchase order, they make a copy and send it to Stock Control so that they will have something to check incoming deliveries against. Purchasing store their copies of the purchase orders in date order as they send them out. Stock Control store their copies in supplier order, so that when new deliveries of stock arrive from a supplier they can check it against the outstanding purchase orders from that supplier (note that Stock Control may receive deliveries for up to 100 purchase orders in a day during the busy times of the year). They then mark the goods as having been received on the purchase order and send the purchase orders back to Purchasing, still in supplier order. Purchasing then have to sort through their copies of purchase orders to mark off the goods as having arrived. They then sort through the outstanding purchase orders on a regular basis, so that they can follow-up on any goods which are due but have not yet arrived. 4. Finance • The Finance department keeps the customer account details in folders sorted in account number order. This makes it easier to find the relevant file and up-date it when the day's transaction records arrive from Sales department, because the transaction record shows the customer's account number and not their name. However, often when account customers ring to ask for information about their account they can't remember the account number (which is not surprising because it is a 10 digit code, and for security reasons it is not written on their account card). This means that Finance staff have to sort through all the accounts to find the relevant one. • For taxation purposes Finance have to keep all records relating to sales or expenditure for two years from the date of the transaction. This means that the daily transaction records from both Sales and Purchasing have to be stored, which makes for a huge amount of paper cluttering up the office. • The swapping of copies of purchase orders between Stock Control and Purchasing means that they sometimes get misplaced. Finance will never pay a supplier until both Purchasing and Stock Control have verified that everything is OK, which means that occasionally when one of them misplaces their copy the supplier does not get paid on time. This causes annoyance to suppliers and can lead to the supermarket having to pay a penalty for overdue invoices. 5. Management • The reports provided by the Purchasing Department to Management are the same as the ones sent to Finance (except that they are for a fortnight rather than a day). Finance needs the daily detail to pay suppliers, but management is interested in the overall picture of the supermarket's expenditure rather than detailed information about every payment to every supplier. • Management currently acts as an intermediary between the Stock Control and Sales departments in setting prices and discount levels. Stock Control tells Management once a week about changes in stock levels, and Management then tells Sales what goods need to be discounted because they are not selling fast enough. Management should not be dealing with this sort of detailed operational level decision which Sales could make if they got the information direct from Stock Control. • Management needs to make decisions about which stock items they wish to discard because they are not selling well enough. In order to help their decision-making Management receive information on sales and on stock levels. However the Sales department provide their information in the form of daily sales records, while Stock Control provide theirs as weekly reports. This means that the information has to be reorganised in order to make it comparable.
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